Correlation Between Citigroup and Village Bank
Can any of the company-specific risk be diversified away by investing in both Citigroup and Village Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Village Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Village Bank and, you can compare the effects of market volatilities on Citigroup and Village Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Village Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Village Bank.
Diversification Opportunities for Citigroup and Village Bank
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Village is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Village Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Bank and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Village Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Bank has no effect on the direction of Citigroup i.e., Citigroup and Village Bank go up and down completely randomly.
Pair Corralation between Citigroup and Village Bank
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.83 times more return on investment than Village Bank. However, Citigroup is 5.83 times more volatile than Village Bank and. It trades about 0.03 of its potential returns per unit of risk. Village Bank and is currently generating about 0.18 per unit of risk. If you would invest 6,991 in Citigroup on December 28, 2024 and sell it today you would earn a total of 194.00 from holding Citigroup or generate 2.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 85.0% |
Values | Daily Returns |
Citigroup vs. Village Bank and
Performance |
Timeline |
Citigroup |
Village Bank |
Citigroup and Village Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Village Bank
The main advantage of trading using opposite Citigroup and Village Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Village Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Village Bank will offset losses from the drop in Village Bank's long position.Citigroup vs. PJT Partners | Citigroup vs. National Bank Holdings | Citigroup vs. FB Financial Corp | Citigroup vs. Northrim BanCorp |
Village Bank vs. Prime Meridian Holding | Village Bank vs. William Penn Bancorp | Village Bank vs. Pathfinder Bancorp | Village Bank vs. Magyar Bancorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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